Businesses don’t need to worry about the environment anymore… right?

Over the past year or two, the urgency around ESG and sustainability — the sense that businesses must act — has softened. For most organisations, it’s still there — just diluted or reframed. Some have actively rejected it — particularly where it suited them to amplify the negative narratives and confirm their bias against it.

ESG is now politically charged — dismissed by some as “woke capitalism” or even economic sabotage. We’ve gone from greenwashing to greenhushing: Businesses continuing the work would rather not be seen doing it.

We saw a 17% year-over-year decline in the number of organizations publishing ESG reports. And the number of ESG-focused shareholder resolutions dropped by a whopping 47% so far this year. Even in the UK and Europe, businesses are increasingly cautious about how loudly they talk about their sustainability efforts.

Set aside politics and there’s still an unavoidable economic reality: With cost pressures high and margins tight, sustainable materials or processes are often the first to be cut. Investors, too, are refocusing on short-term returns, questioning whether sustainability-driven strategies deliver meaningful financial value.

The prisoner’s dilemma of sustainability investment

Let’s take the cynical view seriously. Assume sustainability is no longer rewarded. Assume your customers aren’t making decisions based on it, and your competitors are quietly pulling back.

Then this moves from a moral question to a strategic one: What’s the rational move if you believe others won’t act? It’s a bit of game theory — the classic “prisoner’s dilemma.”

At a high level, there are three possible plays:

• You invest heavily in sustainability and resilience — but others don’t. The systemic impacts of climate risk continue to worsen. Your resiliency efforts make you better prepared. But you’ve taken on the costs of sustainability efforts without “solving” the problem.
• You do nothing — and no one else does either. You avoid upfront investment and preserve margins in the short term. Perhaps you even find ways to boost revenue in the short term by embracing business strategies that are explicitly not sustainable. You must adapt to worsening impacts of climate change, but your competitors are starting from the same place.
• You do nothing — and others act. The system stabilises just enough to avoid more catastrophic climate risk. You’ve avoided the upfront investments and maintained higher short-term margins — and still enjoy the long-term benefits of the avoided climate risk.

On paper, doing less can look like the rational move. But that depends on a set of assumptions that are increasingly difficult to defend: That risks will materialize slowly. That adaptation later will be cheaper than preparation now. That supply chains, infrastructure, and markets will remain stable long enough to react when needed.

These are big gambles.

What this framing gets wrong

If you treat sustainability solely as a collective action problem, then the “wait and see” approach makes sense. But that’s not how this actually plays out inside a business. The first-order benefits of sustainability efforts aren’t dependent on global coordination, and they’re often realized almost immediately:

• Lower energy consumption reduces operating costs
• More efficient use of materials improves margins
• More resilient supply chains reduce volatility and downtime
• Better visibility into environmental risk improves planning and decision-making

If you explained your sustainability efforts to an alien with no knowledge of the politics and science around climate change, that alien would likely recognise a very simple goal: Identifying and eliminating inefficiency. Because inefficiency is always bad business.

“Wait and see” doesn’t work because climate risk is already here

Beyond the efficiency argument, the here-and-now impacts of climate risk make resiliency a business-critical consideration. This is the “double materiality” question, looking not just at what impacts the business has on the environment, but also what impacts the environment has on the business.

We’re now operating in a world where environmental disruption is a constant, compounding business variable.

• Rising temperatures, risking risk: Global temperatures continue to rise, pushing toward critical thresholds where impacts accelerate. Extreme weather events are increasing in frequency and severity, damaging assets, disrupting operations, and driving up insurance costs.
• Employee worry: In North America, EcoOnline’s 2026 Workplace Safety Report workers already cite severe weather as a top operational risk, as well as it being a major concern for lone workers.
• Supply chain effects: Supply chains are under pressure flooding in key manufacturing regions, disruptions in global shipping routes, and resource scarcity creating ripple effects that extend far beyond any single event.

This all shows why the “wait and see” approach is foolhardy: It assumes you still have time before climate risk impacts your business. It assumes worsening impacts will be gradual. And it assumes that you can just flip the resilience switch “on” once climate risk crosses some future threshold. But the risk is already here. The environment must be considered a critical area of risk management, and the greater danger is being unprepared (not over-invested).

But there’s also an upside that gets overlooked: Because climate risk is already impacting businesses, taking action to reduce exposure (improving energy efficiency, strengthening supply chain resiliency, reducing resource dependency) creates immediate competitive advantages. In other words, resilience isn’t just defensive — it’s a path to outperform your peers in the next quarter.

Challenge your thinking:

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What are you implicitly assuming will remain stable over the next 2-3 years — and what happens if it doesn’t?

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Sustainability isn’t a moral issue — it’s an economic imperative

Strip away the politics and terminology, and this is really a question of how efficiently — and how resiliently — your business operates when conditions become less predictable. The same efforts that reduce long-term climate exposure often deliver immediate gains: lower costs, fewer disruptions, and more control over day-to-day operations. You don’t need to assign an ideology to those efforts — you can just call it operational discipline.

This also shows why sustainability investment does not actually present a “prisoner’s dilemma.” In a true dilemma, the best outcome depends on what everyone else does. But here, many of the benefits are captured individually. You don’t need competitors to act in order to reduce your energy costs, strengthen your supply chain, or improve operational efficiency.

And the businesses that can operate efficiently, adapt quickly, and absorb shocks are the ones that outperform, regardless of what the broader narrative happens to be.

More on this situation

2026 State of Decarbonization Report – PwC

The Greenhushing Trap – MIT Sloan Management Review

Study: Are Companies Actually Scaling Back Their Climate Commitments? – Harvard Business Review

News stories we’re following

‘Greenhushing’: Are businesses staying silent about climate pledges? – BBC

How Greenhushing is Disrupting Sustainable Supply Chains – Supply Chain Digital

Greenhushing Is No Longer a Safe ESG Strategy – Environmental Energy Leader

Greenhushing is eroding consumer trust, survey shows – Trellis